Income Tax Exemption Letter Template for India

The Income Tax Exemption Letter is a crucial document in the Indian tax framework, typically required when an organization or individual qualifies for tax exemption under various sections of the Income Tax Act, 1961. This document is essential for entities engaged in charitable, educational, religious, or research activities that meet specific criteria defined by Indian tax authorities. The letter serves as official proof of tax-exempt status and is commonly requested by donors, auditors, and regulatory bodies. It contains detailed information about the nature and scope of the exemption, validity period, conditions to be met, and compliance requirements. Organizations must maintain compliance with the conditions specified in the Income Tax Exemption Letter to retain their tax-exempt status, making it a vital document for ongoing operations and financial planning.

1. Letter Header: Official letterhead, reference number, date, and mode of dispatch

2. Recipient Details: Complete name and address of the entity/individual receiving the exemption

3. Subject Line: Clear indication that this is an income tax exemption letter with reference to the application number

4. Reference Details: List of all relevant application documents and dates of submission

5. Exemption Basis: Specific section(s) of the Income Tax Act under which exemption is granted

6. Scope of Exemption: Clear description of activities/income covered under the exemption

7. Validity Period: Duration for which the exemption is valid, including start and end dates

8. Conditions: Mandatory conditions that must be fulfilled to maintain the exemption status